2. The VP of operations is considering some alternative production plans. The de

Question

2. The VP of operations is considering some alternative production plans. The demand forecast and starting inventory are shown in the following table. For the two alternative plans specified in "a" and "b" below, determine the beginning, ending, and average inventories, and the back order amount, if any, for each quarter Quarter 2 4 Demand Forecast 12,000 13,000 15,000 9,000 Beginning inventory- 1,000 units a. Develop a level production plan that will result in inventory, at the end of Q4, of 1000 units Assume that backorders are allowed and will be shipped in the following quarter before any new orders are shipped. Develop a level plan that eliminates all back orders while minimizing, as much as possible, inventory. You can show an ending inventory, in any quarter, of exactly zero. b.

Explanation / Answer

A.

B.

Total net Demand Quarterly Production 49000 12250

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